Leading Proxy Advisory Firm ISS Recommends That Shareholders Elect Both of Mount Kellett’s Nominees to Baja’s Board of Di...
22 Marzo 2012 - 5:09AM
Business Wire
Mount Kellett Capital Management LP (“Mount Kellett”) today
announced that Institutional Shareholder Services Inc. (“ISS”)
issued a report recommending that shareholders of Baja Mining Corp.
(TSX: BAJ) (OTCQX: BAJFF) (“Baja”) vote FOR the addition of both of
Mount Kellett’s nominees to Baja’s board of directors at the
Special Meeting of Shareholders to be held on April 3, 2012.
“We fully agree with ISS that change is needed at Baja, and we
appreciate its support of our two highly qualified nominees, both
of whom have the best interests of Baja and all of its shareholders
as their top priority,” said Jonathan Fiorello, Chief Operating
Officer of Mount Kellett. “Baja’s board has a track record of
problematic corporate governance that is inconsistent with its
fiduciary duty to shareholders. We look forward to the support of
our fellow shareholders at the special meeting, where they will
finally have the opportunity to put an end to Baja’s pattern of
self-dealing and ensure that their investment is protected.”
In its March 21, 2012 report, ISS stated*:
About the Need for Change at
Baja
- “Based on the evidence of problematic
governance practices in the recent past – including exorbitant
equity grants to directors, the CEO's troubling willingness to take
an active role in what is supposed to be a completely independent
Nominating Committee, and the reactive nature of the governance
provisions the board has recently adopted – the dissident has made
a compelling case that change is warranted at the board
level.”
About the Board’s Questionable Stock
Options Grants
- “Such large grants may call into
question directors’ ability to provide effective oversight of
management’s compensation and activity, since their interests may
be more aligned with executives than shareholders.”
- “For example, the proposed amendment to
the 2011 stock option plan is being proposed only after it was used
to make exorbitant grants to directors. One might legitimately
question whether closing the barn doors after all the horses have
escaped is the best approach to managing an equity plan.”
About the Current Board’s Troubling
Corporate Governance
- “While the board's actions to resolve
problematic governance practices are noteworthy, these actions
appear largely reactive to the dissident's critique, raising the
question of whether the board has fully internalized the view that
corporate governance is critical for building the confidence of
unaffiliated shareholders.”
- “Moreover, the timing of certain
changes calls into question the board's motivation for making these
changes.”
About Baja’s Mischaracterization of Mount
Kellett’s Motives
- “Accordingly, the company's assertion
of “creeping takeover” lacks credibility.”
- “There is, however, no evidence Mount
Kellett has previously executed a creeping takeover strategy, or
that it has ever launched a hostile bid for any of its portfolio
companies. The dissident, moreover, made this point explicitly to
the board in its May 2011 presentation. In that presentation, Mount
Kellett pointed out that it does not commence hostile transactions
or buyouts and is only interested in creating maximum value for all
shareholders.”
About the Strength of Mount Kellett’s
Nominees
- “As the largest shareholder of Baja,
Mount Kellett's interests are likely highly aligned with those of
other shareholders.”
- “Additionally, Waisberg's depth of
corporate governance knowledge, as a certified ICD graduate, and
experience, on numerous other public boards, should allow him to
contribute considerably to the effective oversight of the Baja
board.”
- “Accordingly, votes on the dissident
BLUE card are warranted: FOR items 2, 3, and 4 (which call for
expanding the board to nine, and adding dissident nominees Lehner
and Waisberg to the board).”
Mount Kellett urges its fellow shareholders to vote their
BLUE proxy card to elect Mr.
Stephen Lehner and Mr. Lorie Waisberg, two highly qualified,
independent candidates, to the Baja board of directors. Once
elected, Messrs. Lehner and Waisberg will represent a minority of
the board and will work with the other directors to provide
much-needed independent oversight and an owner-driven mindset.
Mount Kellett continues to believe that Giles Baynham and Gerald
Prosalendis – two hand-picked directors who are very much entangled
in Baja’s web of conflicts – should be removed from Baja’s
board.
For more information on how to vote your BLUE proxy, as well as access to other
important materials, please visit www.ShareholdersForBaja.com. If
you have any questions and/or need assistance in voting your
shares, please call Kingsdale Shareholder Services at
1-888-518-1562 or 1-416-867-2272 (collect calls accepted).
About Mount Kellett Capital Management LP
Mount Kellett is a multi-strategy private investment firm
focused on global value, special situations and opportunistic
investing. The firm has approximately 100 employees with offices in
New York, Hong Kong, London, and Mumbai. The firm currently has in
excess of $6 billion in assets under management.
* Permission to quote from the ISS report was neither sought nor
obtained.
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